Whether it’s vinyl records, Pokémon cards or anything in between, if you enjoy collecting as a hobby, for profit or for pleasure, you should consider collectibles insurance.
If your collection holds value or is simply valuable to you, you may be surprised to find out that your basic homeowners insurance likely doesn’t cover it. What you have might be worth something, so learn what you can do to protect your investments now.
Why Collectibles Insurance?
It’s generally understood that the better the condition of a collectible, the higher its value. Many collectibles require proper storage, occasional maintenance and can lose value or become worthless if damaged.
While homeowners insurance is meant to cover major damage to your home as a result of theft, fire or other unforeseen circumstances, there are limits to this kind of policy’s reach. Homeowners insurance coverage often does not extend to “non-essential” items like collectibles.
“Most homeowner policies offer only limited coverage, and you will most likely need a separate policy to provide any meaningful coverage,” according to Raymond Eng, AAA VP of Insurance Sales. “Typically, only your homeowner carrier will provide this coverage for you, so keep that in mind.”
A collection in itself is an investment, often taking a significant amount of time, money and effort to assemble and maintain. Collectibles insurance can’t replace an item – especially if it’s very rare or has sentimental value – but it can refund you its monetary value. In the chance something falls off a shelf and breaks or gets ruined by water damage, you’ll be covered.
Collectibles insurance takes out much of the worry surrounding what could be some of your most valuable possessions.
Creating an Inventory
Similar to making a home inventory list or video for your homeowners insurance, documenting your collection is a great place to start when looking into collectibles insurance. Creating an inventory will allow you to know exactly what you have and help you prove the collection’s worth.
Begin with listing when you bought/received an item and how much you paid for it (if applicable). Keep receipts for newer items and any appraisal documents you might have. Appraisal documents may be necessary in order to process a claim later on.
When taking photos or videos of your collectibles, make sure the lighting is good and that the picture/video quality is clear. Finally, decide on a method for keeping things organized. Whether it’s sorting items alphabetically, by age or through a number and/or lettering system, thoughtful organization will make keeping track of your collection much simpler.
Knowing the Worth
Figuring out how much your collection is worth could be as simple as getting a catalog/book or seeing what similar items are going for online.
If you suspect your collection is worth more than a couple thousand dollars or is so specialized that pricing could be difficult, you might want to consider meeting with a professional appraiser instead. An appraiser should be an independent agent who can offer official documentation regarding your collection.
To make sure the information in your inventory is correct, and that you know the true worth of your collection, update your appraisals every three to five years.
Covering Your Collection
If your collection is on the smaller side, your homeowners insurance may cover your collectibles to a certain extent. The best thing to do is find your policy, read it through and see what it says about special collections.
“Some policies limit coverage of non-household items to a maximum claim amount, usually anywhere from $500 to $2,000,” according to Investopedia. Other policies deny coverage for these types of items altogether.
If your collection is worth more than your insurance covers, you’ll likely want to look into attaining additional coverage. That could mean adding a “rider” or “floater” to your existing policy or reaching out to a specialty insurer.
As with any kind of insurance, shop around a little before deciding on a company. Certain insurers require different documentation and price minimums vary.
When it comes to the basics, you’ll want your policy to cover a wide range of losses. This includes breakage, fire, theft or loss in the mail (if you plan to sell that way). Some policies will only cover a loss within the home. If you’ll be traveling with collectibles, look for coverage that follows you.
Collections take time, money and energy to assemble. You can protect those efforts by investing in collectibles insurance.
Contact a AAA insurance agent to learn more. AAA.com/Insurance.
What would you want to protect with collectibles insurance? Tell us in the comments.